Bermuda, Mexico to sign reassurance agreement

Bermuda and Mexico plan to sign a bilateral agreement that will allow Mexican companies to open reassurance units on the island, which should help reduce the reassurance costs associated with high risk projects, Mexican daily El Economista reported. In house reassurance allows companies to save up to 10% on insurance costs, Eduardo Fox, manager of reassurance consultancy ASK, told the paper. Reassurance is typically handled by a non reassurance company when coverage is not available on the market or is too expensive. Fox added the presence of reassurance units in Bermuda would open up financing for companies, especially from international organisations. By allowing this type of reassurance in Mexico, similar funding for infrastructure, telecommunication and industry could also be obtained. By going to Bermuda for reinsurance, Mexican companies eliminate the need for intermediaries and acquire reassurance at wholesale prices, Fox said.